U.S. Stocks Close Lower

By

Chris Dieterich

Updated Nov. 26, 2012 2:15 p.m. ET

NEW YORK—The Dow Jones Industrial Average cooled off after notching its biggest advance in months last week, with shares of most retailers declining after Thanksgiving-weekend sales growth came in below last year's levels.

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The Dow Jones Industrial Average slumped, and retailer stocks mostly fell as investors mulled Thanksgiving-weekend shopping activity that rose at a slower pace than it did last year. Jonathan Cheng has details on The News Hub.

The Dow dropped 42.31 points, or 0.3%, to 12967.37. Investors took a cautious approach after returning from a holiday-shortened week that saw the Dow surge 421 points, the biggest one-week rise for blue chips since June.

Dow Jones Newswires' Chris Dieterich joins the News Hub to discuss how the fiscal cliff, elections in Spain and the Greek economy will affect the markets. Photo: REUTERS.

"Today's market action is just a giveback from the extremely strong performance late last week," said
Jim McDonald,
chief investment strategist at Northern Trust Global Investment.

The Standard & Poor's 500-stock index closed down 2.86 points, or 0.2%, to 1406.29, halting a five-session streak of advances.

Telecommunications and energy stocks fell most sharply.

UnitedHealth Group
dropped after the company affirmed its 2012 earnings estimate, but provided a 2013 outlook that was below current analyst projections.

Utility stocks, by far the worst performers over the past month, bucked the trend to add 1.3%. Technology stocks also posted gains.

Major benchmarks were able to bounce from session lows and wipe away the worst of Monday's decline late in the session.

The Nasdaq Composite Index reversed course and rose 9.93 points, or 0.3%, to 2976.78, ticking higher for the sixth session in a row.
Apple
climbed after Citigroup analysts initiated research coverage of the stock with a "buy" rating.

Shares of online retailing giant
Amazon.com
and online auctioneer
eBay
advanced on so-called Cyber Monday, typically the biggest online shopping day of the year. Total spending over the Thanksgiving weekend rose an estimated 13% over last year to $59.1 billion, according to the National Retail Foundation, less than last year's sales increase of 16%.

Department-store retailers took a hit, however. Macy's and
Nordstrom
were among the biggest decliners on the S&P 500.

European markets also ended broadly lower. The Stoxx Europe 600 snapped a five-session streak of gains, down 0.5%. In focus was a meeting of euro-zone finance ministers. The group is looking for common ground on austerity measures for Greece, a prerequisite for the release of more aid for the debt-strapped country. Germany's DAX dropped 0.2%, while France's CAC-40 fell 0.8%.

Investors said that continuing efforts in the U.S. by lawmakers to compromise on a series of potential tax increases and spending cuts in the new year, combined with negotiations in Europe, are likely to drive the market's direction.

"I suspect that we're going to be tossed around a bit on headlines coming out of these negotiations on the 'fiscal cliff,' and to a lesser extent, Greece," said
Bill Stone,
chief investment strategist at PNC Asset Management Group.

In U.S. economic news, business activity among Texas-area manufacturers contracted in November from a month earlier.

Facebook
rallied as Bernstein Research, formerly one of the most bearish analysts that cover the stock, raised its investment rating to "outperform" and lifted its price target. Shares were on pace to close at their highest level since July.

Knight Capital Group
climbed after The Wall Street Journal reported late on Friday that the securities firm is weighing the sale of its profitable market-making business. The report prompted analysts at Keefe, Bruyette Woods to raise their stock-recommendation rating on Knight to "market perform" from "underperform."

Front-month crude oil futures declined 0.6% to settle at $87.74 a barrel, while November gold futures lost 0.1% to $1,749.50 a troy ounce. The dollar edged higher against the euro but eased slightly against the yen. Yields on benchmark 10-year U.S. Treasury bonds fell to 1.664%, as demand rose.

Asian markets closed mostly higher on the back of sharp gains in the U.S. on Friday. Japan's Nikkei Stock Average rose 0.2% to a 6½-month high and Australia's S&P ASX 200 tacked on 0.3%. China's Shanghai Composite bucked the trend by slipping 0.5%.

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